Economics/Microsoft - Essay Example

But it is only the beginning. Microsoft is going to not only occupy other market niches from wallet computers to car navigation system but is aggressively moving towards powerful position in the Internet itself. Microsoft Network helps the company to do financial-transaction processing or engage in electronic commerce. This way Microsoft threatens to transform the very structure of the worlds computer businesses. Microsoft with its Windows 95 cannot boast of stability of this personal operating system. Apple, I.B.M. and Next offered far more sophisticated products.

But technically perfect product does not mean the best-selling product. Time and strategy allowed the company to enter the market and win market share. Apple, personal-computer company, having the benefit as developers designing software for a controlled hardware, failed to gain advantage in the market place. I.B.M., the mainframe giant, also failed to persuade manufacturers of P.C. hardware and independent software developers in advantageousness of OS/2 as an operating system which was actually superior to Windows 3.1. The powerful dominance of Microsoft in software market is evident.

The question is if “computer firm has used its market dominance to restrain trade in violation of federal antitrust statutes.” Microsoft is charged in monopolizing the computer operating system market, in integration of the Internet Explorer web browser to cut competition from Netscape and use of market power to form anticompetitive agreements.(Policy Debate, 2004) The charge of operating systems market monopolization is built on the fact that Microsoft has received up to $10 billion in monopoly profits.

However, the company did not use its dominance to set prices which exceed competitive prices. Instead it kept them low to overcome competition. The allegation of integration Internet Explorer